The bank lowered its overnight rate target by 50 basis points, from 1.75 per cent to 1.25 per cent. (The Logic)
Talking point: The cut comes one day after the U.S. Federal Reserve reduced its rate by the same amount and G7 finance ministers and central bankers promised coordinated action to address the economic impact of COVID-19. This is Canada’s first rate cut since 2015, and is designed to reduce the “material negative shock” of the virus. However, the long-term economic impacts on the Canadian economy remain to be seen. Firms are adding COVID-19 risk to their earnings disclosures. Companies including GM Canada and Tim Hortons parent firm Restaurant Brands International are limiting corporate travel. Ottawa-based Shopify cancelled its upcoming conference, as has Toronto-based Vena Solutions, which was planning a 500-person conference in May.